Engineering News

Bidding War for Asciano

Qube has raised its cash component by 7.0 cents to $7.04 per Asciano share, in addition to one Qube share, valuing the target company’s shares at $9.24 each.

The improved bid has helped it gain the confidence of its target, and Asciano’s board on Monday declared the offer superior to its rival from Canadian infrastructure giant Brookfield.

Qube’s celebrations could, however, be shortlived, with the Canadian predator now considering an all-cash bid for Asciano worth $9.28 a share.

Asciano shares perked up on the news. At 1100 AEDT, the stock was up 22 cents, or 2.4 per cent, at $9.11 each. Qube shares were up nearly one per cent at $2.22.

The announcement comes days after the Australian Competition and Consumer Commission (ACCC) delayed a decision on the competing multi-billion dollar takeover proposals by another month, until March 24.

The ACCC is assessing issues that may be raised by the takeover of Asciano, which owns the Pacific National rail business and Patrick ports business.

The consortium said it had raised its offer price “in part recognition of the expected cash generation by Asciano in the period prior to (the) close of any takeover offer”.

Asciano said its board had determined that the revised Qube proposal is superior to Brookfield’s original cash-and-scrip offer from June 2015.

It has now asked Brookfield to submit a matching or superior proposal by February 15.

The Canadian infrastructure investor has separately written to Asciano saying it is working to add two new partners to its consortium, and is considering revising its proposal to an all-cash bid valuing Asciano at $9.28 per share.

Brookfield in December offered to divest part of Pacific National’s intermodal business in order to address the ACCC’s concerns regarding reduced competition in rail haulage services in Western Australia and Queensland.